To reduce your labour costs in the fleet management industry, you must implement various cost-saving strategies. These include:
These six important ingredients will help reduce labour costs. Cartrack has successfully done so for numerous companies in South Africa, and this article is all about how we approach it.
The biggest labour increases for any fleet company are:
Finding solutions to these challenges will significantly lower your labour costs and create more consistency within your company.
Let’s look at each of these more in-depth and explain why each of them are depleting your labour budget.
If you’ve been in business for long enough, you already know that it’s way more expensive to hire new staff than to retain the staff you already have. The amount of time that goes into recruitment, interviews, and onboarding can be excessive—and time is MONEY!
This is especially true with drivers. Fleet companies that find a good team of drivers save money if they manage to retain them. That’s because experienced drivers are not only more efficient, but also reduce the hidden costs of constant turnover.
When those busy seasons arrive, you might find yourself hiring outside of the company to get your logistics fully operational. This isn’t ideal, since you should have your year planned out in terms of what needs to be delivered and when.
This is often impossible to do if you’re trying to do it manually. But if you could automate this planning process, you’d end up hiring outside help less often—and perhaps even not at all.
Being short-staffed can be just as detrimental to your operations (and your budget). That’s when you have to ask your drivers to work overtime. In South Africa, this can cost up to double or more of your usual staff overheads.
Making sure your company, your vehicles, and your drivers are compliant can also increase your labour costs. Not every driver who arrives at your company is necessarily ready to do the job you need them to do. Sometimes you need to invest in extra license training, safety courses, refresher courses, or compliance workshops—and these aren’t free!
Things happen, and your drivers might not always be able to come into work. If driver absenteeism causes delivery delays, this will hurt your company’s income—not to mention its reputation. Having drivers on standby can help prevent this, but that’s not always possible or practical when it comes to salaries.
The answer to these fleet labour costs?
✅ Automation
✅ Staff retention
✅ Training
✅ Optimisation
Let’s show you how it’s done.
When you implement automation in managing your fleet, your costs invariably go down because you eliminate manual work and minimise human error. Your daily operations will also begin to speed up! However, this is only viable if you have the right fleet management software, one that integrates well with your existing systems while streamlining your processes.
Many fleet management software packages today are already AI-driven. This gives you a smart system that’s programmed to be proactive in managing your drivers, your staff assignments, and even your vehicle maintenance. With this automation in place, you’ll need less people to run your fleet, and less time to do so effectively.
Fewer mistakes = Higher profits!
It’s true that your fleet management staff are integral to your business. However, if you want to reduce labour costs and increase efficiency, then integrating an automated system to take over certain tasks is necessary.
Automation frees your team from time-consuming admin, scheduling, and reporting, allowing them to focus on higher-value work. By reducing unnecessary staff hours, you’ll be able to employ fewer people, and cut working hours.
Fewer staff hours = Higher profits!
Automation greatly increases the speed at which you can complete tasks. With the help of automatic route optimisation, smart driver assigning, and better scheduling, you’ll get the most out of each driver and waste less time.
More time = Higher profits
Once automation takes hold of your fleet management, higher productivity is inevitable! If you’re a delivery company, you get more deliveries done. Lift service? More passengers. Logistics? More products between point A and point B.
More work = Higher profits!
Driver efficiency plays a MASSIVE role in lowering your fleet labour costs. When your drivers are more efficient, they use less time, less fuel, and fewer resources to complete their trips. A driver who follows the best route possible will avoid unnecessary idling, and maintain steady driving habits. This even affects overtime pay!
You have more control over your fleet. Efficient drivers also need fewer interventions from managers and dispatchers, which lowers administrative workload. Here's an overview of what this looks like:
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Yes, it’s definitely worth it to handle your own vehicle maintenance if you own a large fleet. However, this is only viable if you have the right software for doing so. You’ll need a system that preemptively alerts you to maintenance needs, handles your vehicle maintenance scheduling, and keeps operations flowing while vehicles are not running.
Example:
A food retail store decides to start delivery of their goods to customers. They start off with 10 motorcycles, but with growing popularity they soon grow to 50 motorcycles!
At any given time, around 2 to 5 motorcycles are “out of action” due to maintenance. The food retail company needs to automate their maintenance scheduling. However, they also need to know which motorcycles are about to need maintenance, and which have already been recently maintained.
As demand for their services grow, they’re now on 80 motorcycles! They decide it’s time to get a fleet management system that not only tracks their vehicles, but also plans maintenance—months ahead of time. The system does this quite cleverly by:
Now, the food retail company has far less downtime. They’re completing more deliveries and bringing in more income. Not only that, but their reputation is growing because of their excellent and fast service.
The result? They buy more vehicles, hire more drivers, and expand their reach to the neighbouring areas.
If this system sounds too good to be true, why not test it yourself by giving us a call?
Both driver training and retaining your staff will greatly affect your fleet labour costs for the better. Training your drivers (and subsequently holding on to them for as long as possible), mitigates the need to hire new people, start training from scratch, and suffer periodic downtime.
But why?
Well, there are a lot of misconceptions about driver training and staff retention. It’s all about total cost of ownership fleet management. So, let’s look at some of the myths and compare them to the FACTS!
Preventing vehicle theft reduces your labour costs in ways you may not have thought of. Think about the amount of unpaid hours your staff will have to spend on reporting the theft. Not to mention police statements, insurance claims, and arranging a replacement vehicle (once the insurance has actually paid out).
It’s just not worth it!
REMEMBER: The majority of vehicle theft and hijacking happens to business vehicles. So protecting your cars, motorcycles, and/or trucks is vital if you want to best utilise your labour expenses for ACTUAL productivity.
Losing vehicles doesn’t necessarily hit your pocket in terms of the loss itself, but your labour costs will be wasted. That’s why it’s better to leave vehicle theft and recovery to the experts.
The best way to protect your company vehicles from theft or hijacking is to add multiple layers of security to each one.
When a company vehicle is stolen, it costs more than just the car. Staff spend time reporting the theft, handling insurance, and rescheduling deliveries. Drivers may sit idle, extra shifts might be needed, and temporary staff could be hired. Preventing theft keeps your team working, saves money, and stops hidden labour costs from piling up. Just look at this:
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Driver optimisation increases efficiency, which automatically lowers your labour costs. As a fleet company, you have two main assets in your drivers: Skill, and Time. When routes are planned smartly, you conserve both. Drivers spend less time on the road, avoid traffic, and reduce idle time. This lowers overtime pay and fuel expenses while improving delivery speed.
Cartrack helps fleet managers reduce labour costs by giving real-time visibility of vehicles and drivers. As we've seen, this results in automated route planning, driver monitoring, and compliance alerts. For you, this means less time spent on admin and fewer mistakes on the road.
Keep your drivers more productive. Reduce unnecessary overtime. Call Cartrack TODAY!
With smarter insights, you can now optimise your task and maintenance schedules and sky-rocket driver efficiency. Tracking driver behaviour and vehicle usage helps you to:
If you don't have this technology yet, you're being left behind! Cartrack makes sure your fleet runs smoothly, which is ultimately the best way of reducing labour costs in fleet management in South Africa!
You can keep drivers around by making them feel appreciated and supported. Give them fair pay, training, and shout-outs when they do well. At Cartrack, we know that happy drivers stick around longer, which saves you time and stress from hiring new people all the time.
Leasing vehicles can cut labour costs because you spend less time fixing cars or dealing with ownership paperwork. At Cartrack, we see that leasing keeps your fleet running smoothly, so drivers can focus on the road instead of car problems.
A fuel surcharge can help lower labour costs by nudging drivers to be smarter with routes and fuel. When drivers manage fuel better, you spend less time sorting out disputes or extra hours caused by waste. At Cartrack, we know this helps save money across your fleet.
The total cost of owning a car is all the money you spend over time. This includes the car’s price, fuel, insurance, maintenance, repairs, taxes, and fees. You also lose money as the car loses value (depreciation). Adding all these costs gives the total cost of ownership.
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Discover effective ways to reduce labour costs in fleet management across South Africa. Learn how technology, automation, and smart workforce strategies can improve efficiency and cut expenses.
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